Xcel officials: 30 percent renewable energy target by 2020 ‘not impossible’

Officials for Xcel Energy, Colorado’s largest utility, said Wednesday the Minnesota-based company is willing to consider upping the state’s renewable energy standard (RES) to 30 percent by the year 2020, a proposal highlighted by Gov. Ritter in a speech marking the beginning of the legislative session this week and at the center of the first House bill introduced yesterday as the session got underway.

Springfield, Colo. wind farm ( Wavy1; Flickr)
Springfield, Colo. wind farm ( Wavy1; Flickr)

“The concept of trying to reach a 30 percent renewable level for Xcel Energy in Colorado is one that is not impossible, with or without legislation,” Xcel spokesman Tom Henley told the Colorado Independent. “We have been in discussions with the governor’s office and they have shared their ideas with us, including new legislation to raise the target from its current 20 percent level.”

Setting the bar higher

Rep. Max Tyler, D-Lakewood, introduced HB 10-001 Wednesday, saying it’s time to set the bar even higher, given the price volatility of finite energy resources like coal and natural gas and the possibility of federal climate change legislation.

“Xcel has really been on-board with renewable energy resources,” Tyler told the Independent Wednesday. “They’ve got the largest wind power installation in the county and they were ahead of their standard of meeting their goal of 20 percent by 2020, and this is saying, ‘OK, good job, let’s do a little bit more; let’s put a stretch target and really make it work for the people of Colorado.’”

Tyler’s bill would only affect investor-owned utilities regulated by the Colorado Public Utilities Commission, which includes Xcel (provider of 55 percent of the state’s electricity) and Black Hills Electric in the Arkansas River Valley (about 4 percent). Municipal utilities and member-owned rural electric associations (REAs) would be exempt, although still subject to a 10-percent-by-2020 mandate imposed by the legislature in 2007.

“The rural electrics have a different take on the world and [the bill] will not include them at this point in time,” Tyler said of the REAs, which account for about 23 percent of electricity consumed in the state. Municipal utilities such as the city of Colorado Springs (8.5 percent) account for the remaining 18 percent.

Critics of efforts to mandate higher percentages of renewable energy say such legislation will increase costs for consumers at a time when they can least afford it.

“That’s absolutely wrong,” Tyler said. “Currently there’s a 2 percent [price] cap [on the 20 percent mandate imposed in 2007], and that’s not going to change. This will stabilize the costs to people because 30 percent of our electrical generation is going to be based on resources and supplies that are not going to fluctuate with the market.”

Keeping that 2 percent cap in place is key for Xcel, Henley said.

“Through our already filed compliance plan, our company anticipates we would be very close to a 30 percent level, within the current 2 percent rate cap,” Henley said. “As long as the cap on increased costs remains in place as protection for our customers, we are willing to consider increasing the standard.”

Henley said Xcel currently gets just over 10 percent of its base load from wind, 1.4 percent from hydroelectric and a small percentage from other sources. That compares to 57 percent from coal and 31.5 percent from natural gas. Those sources, especially coal, are increasingly under fire from regulators for high levels of greenhouse gas emissions blamed by scientists for worsening global warming.

Job killer or job creators

Ritter has been an outspoken champion of renewable energy during his three years in office, pushing his “New Energy Economy” at every turn. Scott McInnis, the Republican frontrunner for the governor’s office, has blasted the focus on renewables.

“Scott’s very concerned about the lack of balance that we’ve seen in energy policy — that you’ve had basically one focus on various alternative sources, which is perfectly fine, except we’ve had what in Scott’s view has been a targeting, if you will — perhaps even a demonization — of oil and gas,” McInnis spokesman Sean Duffy said Monday. McInnis, an oil and gas attorney from the state’s Western Slope, wants to do more to revive Colorado’s natural gas industry.

Colorado voters in 2004 passed Amendment 37, which imposed a 10 percent renewable standard on all utilities. Members of REAs such as the state’s largest, the Intermountain Rural Electric Association, opted out of that mandate only to have the legislature impose a 10 percent RES in 2007. Colorado’s 30-percent RES by 2020 would put it among the leading states in terms of requiring renewable energy portfolios, behind only California at 33 percent by 2020.

Some REAs have bitterly opposed RES mandates, claiming such legislation discriminates against their membership based on their right to dissent on the issue of global climate change. Because the co-ops are not investor-owned, they are not regulated by the PUC, giving the state less power over what energy sources the REAs use to build their base loads.

A bill seeking to impose conservation measures on co-ops with 130,000 members or more (IREA, the state’s largest, is the only one that qualified) didn’t make it out of the House last session. But a bill aimed at making co-op board elections more transparent and fair to challengers has been proposed for this session. REA boards are increasingly seeing challenges for so-called green candidates.

As for Tyler’s bill, while market forces are already naturally increasing wind, solar, biomass and geothermal energy production in Colorado, he said legislation sometimes provides a needed nudge to do even more.

“That’s the kind of nudge that maybe for an electrical utility makes it better and easier for them to deal with the board of directors; maybe it provides a better resource for the people in Xcel Energy who are driving the renewable resources; and it might give them a little more leverage with their corporate headquarters, too,” Tyler said.

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